GST Council May End IGST Exemption on Gold, Silver and Platinum Imports by Banks and Nominated Agencies
The GST Council may withdraw the exemption from Integrated GST (IGST) that banks and government-nominated agencies get when they import gold, silver and platinum. The proposal is expected to come up at the Council's meeting on 7 October 2026.
Today, other importers pay 3% IGST on these precious metals at the time of import. Banks and nominated agencies (public sector trading bodies notified by the government) do not pay it at that stage.
The exemption was given in 2017, soon after GST began, when imports of precious metals were tightly controlled and routed mainly through these bodies (a system called "canalisation").
The aim of withdrawing it is to curb non-essential imports, reduce the outflow of foreign exchange, support the rupee and bring banks and agencies on par with private bullion importers.
If the exemption ends, banks and agencies will have to pay 3% IGST upfront. This raises the cash they need to hold stock (working capital), and part of the cost may reach jewellers and buyers.
The move comes after the government raised the total customs duty on gold and silver from about 6% to about 15% from 13 May 2026, citing pressure on foreign exchange reserves and the rupee.
The GST Council (Article 279A)
The GST Council is a body of the Union Finance Minister and the finance ministers of all states. It recommends the main rules of the Goods and Services Tax (GST): tax rates, which goods and services are taxed, and which are exempt. It was created by the Constitution through Article 279A, added by the 101st Constitutional Amendment Act, 2016. Any change in an exemption, like the IGST exemption on precious metal imports, is first discussed and recommended by the Council.
The proposal to withdraw the IGST exemption on gold, silver and platinum imports by banks and nominated agencies needs the Council's recommendation. If the Council agrees, the exemption notification will be changed, and these importers will pay 3% IGST like other importers.
Gold Import Policy in India
India is one of the two largest buyers of gold in the world, along with China. But India mines very little gold of its own. So almost all the gold Indians buy for weddings, festivals and savings comes from abroad. Gold import policy is the set of rules the government uses to decide who can import gold, how much tax is paid on it, and how to reduce the country's need to import it.
The proposal to end the IGST exemption for banks and nominated agencies is a new step in India's gold import policy. Along with the higher customs duty from May 2026, it aims to make gold imports costlier, reduce dollar outflows and support the rupee. It also creates equal treatment between these bodies and private importers who already pay 3% IGST.
Balance of Payments (BoP)
The Balance of Payments (BoP) is a record of all money that flows between India and the rest of the world over a period, usually a quarter or a year. It has two main parts: the current account (trade in goods and services, income and transfers like remittances) and the capital account (investment and loans). When India imports more than it exports in total current items, it runs a current account deficit (CAD), which must be paid for through foreign investment, loans or by using reserves.
Gold and silver are among India's largest imports. With crude oil above $100 a barrel also raising the import bill, the government is trying to cut non-essential imports like gold to keep the current account deficit under control and reduce pressure on the rupee and reserves.
- GST Council meeting on 7 October 2026 to consider withdrawing the IGST exemption
- IGST on imported gold, silver and platinum: 3%; banks and nominated agencies exempt since 2017
- Exemption notification: No. 77/2017-Customs, dated 13 October 2017
- Customs duty on gold and silver raised to about 15% (BCD 10% plus AIDC) from 13 May 2026; it had been 6% since July 2024
- DGFT made imports of high-purity gold and silver "restricted" in May 2025
- India's gold imports in 2025-26: record $71.98 billion; about 721 tonnes
- Nominated agencies include MMTC Ltd, MSTC Ltd, PEC Ltd and HHEC
- India's CAD in Q1 2026-27: $4.2 billion (0.5% of GDP)